Japan’s ‘Matrix’-like dilemma: Too many jobs, too few immigrants

Big employers are widening their nets to make sure they get the best recruits — and waking up to an untapped source of recruits — foreign students at Japanese universities

By Shoko Oda
and Isabel Reynolds / Bloomberg

Illustration: Yusha

Graduate recruitment in Japan looks a bit like a scene from the movie The Matrix. Hordes of students dressed in identical black suits and white shirts make the rounds of seminars, tests and interviews.

Even as jobs outnumber applicants, these “Agent Smiths” still fight it out for coveted positions at big-name companies, while leaving smaller employers out in the cold.

“Popular firms in industries like finance have seven applicants for one job. For us, we have seven competitors going after one candidate,” said Shuto Kuriyama, who works in human resources at regional furniture chain Shimachu Co.

He was trying to attract students to the company’s presentation at a graduate recruitment fair in Chiba near Tokyo this month, while nearby booths for big-name firms were heaving with job seekers.

The low birth rate and slowly recovering economy are keeping Japan’s job-to-applicant ratio at a 25-year high, with the figure at 1.43 for January. In Tokyo, there are more than two jobs for every applicant.

Small companies are the worst hit by the shortage of workers, but even some better-known employers are gradually changing their rigid hiring and employment practices — and some are beginning to consider foreigners.

With one of the lowest unemployment rates in the developed world, Japan stands in contrast with Europe and the US, where a lack of good jobs has fueled support for politicians who want to crack down on free trade and immigration. Only 3 percent of Japanese are out of work, compared with 9.6 percent in the eurozone and 4.7 percent in the US, the latest figures show.

Looking for a job in Japan means not only buying a suit and fine-tuning a resume, but learning the elaborate rituals of the nation’s business etiquette, including how to enter a room, bow and sit correctly, and the right levels of polite language to use when speaking to interviewers or clients.

Big companies and elite students have exactly seven months to find one another. The hiring season for third-year university students opened on March 1 and major firms will formalize their recruitment decisions by handing out certificates at ceremonies held on Oct. 1. Most major employers only take on recruits in April immediately after graduation — there are no post-college “gap years” and few second chances.

Polls of the most popular employers among students generally find major banks, trading and insurance companies, travel agents and airlines among the top 10. While large employers offer starting salaries little different from their smaller counterparts, the steeper pay trajectory — at least for men — means a foot in the door promises a far higher mid-life income for those who stay the course.

Some also offer benefits such as company-subsidized accommodation or resort vacations.

Michiyoshi Aoki, 22, among the 31,000 students at the recruitment fair, said his job search would not include small companies.

He already has his sights set on the big names in life insurance and automobiles, including Toyota Motor Corp, Nissan Motor Co and Honda Motor Co.

“There is still a lot of competition to get into big companies, but if you work at a large firm you will have bigger opportunities and more of a future,” Aoki said.

With a market even tighter than before the global financial crisis, large companies are beginning to loosen their hiring practices and mid-career recruitment is growing.